Opinion
1 CA-CV 10-0799
10-04-2011
THOMAS SPIEK and BRENDA SPIEK, husband and wife, Plaintiffs/Appellants, v. PIZZA HUT, INC., a California corporation authorized to transact business in Arizona, Defendant/Appellee.
HYMSON GOLDSTEIN & PANTILIAT, PLLC By Eddie A. Pantiliat and Isidore Yetnikoff Attorneys for Plaintiffs/Appellants Scottsdale BERRY & BRANCH, PLLC By Christopher J. Berry and Joseph I. Vigil and Katherine R. Branch Attorneys for Defendant/Appellee Phoenix
NOTICE: THIS DECISION DOES NOT CREATE LEGAL PRECEDENT AND MAY NOT BE CITED
EXCEPT AS AUTHORIZED BY APPLICABLE RULES.
See Ariz. R. Supreme Court 111(c); ARCAP 28(c);
Ariz. R. Crim. P. 31.24
MEMORANDUM DECISION
Not for Publication - (Rule 28, Arizona Rules of Civil Appellate Procedure)
Appeal from the Superior Court in Maricopa County
Cause No. CV2009-055269
The Honorable Robert A. Budoff, Judge
AFFIRMED
HYMSON GOLDSTEIN & PANTILIAT, PLLC
By Eddie A. Pantiliat
and Isidore Yetnikoff
Attorneys for Plaintiffs/Appellants
Scottsdale BERRY & BRANCH, PLLC
By Christopher J. Berry
and Joseph I. Vigil
and Katherine R. Branch
Attorneys for Defendant/Appellee
Phoenix NORRIS, Judge
¶1 In this timely appeal, Plaintiffs/Appellants Thomas Spiek and Brenda Spiek argue the superior court should not have granted summary judgment to Defendant/Appellee Pizza Hut, Inc. based on a release. They assert the release was void or otherwise unenforceable because of a unilateral mistake of fact or breach of the implied covenant of good faith and fair dealing. Because the Spieks failed to show the existence of material issues of fact at trial, however, we disagree and affirm summary judgment for Pizza Hut.
FACTS AND PROCEDURAL BACKGROUND
¶2 On January 3, 2008, Shawn Adams, while driving his own automobile, rear-ended Thomas Spiek's automobile. Thomas Spiek suffered serious injuries. At the time of the accident, Adams was employed by Pizza Hut and was acting within the course and scope of his employment. Adams was personally insured by Geico, Inc.
¶3 After an exchange of correspondence with Geico, see infra ¶ 9, the Spieks sued Adams for negligence. Geico immediately tendered the amount of Adams' policy limit, $100,000, to settle the Spieks' claim in full. The Spieks accepted the settlement offer and signed a release in which they released any and all claims against Adams arising out of the January 3, 2008 collision.
¶4 The Spieks then submitted a claim to their own insurance company for under-insured motorist coverage. Their insurer essentially denied their claim because Pizza Hut had a substantial secondary insurance policy covering the accident ("Pizza Hut's secondary coverage") which it believed would fully cover Spiek's injuries.
¶5 The Spieks amended their complaint to assert a claim for negligence, under a theory of respondeat superior, against Pizza Hut. Pizza Hut moved for summary judgment, arguing, as a matter of law, that Spieks' release of its employee Adams also released Pizza Hut, as Adams' employer. The court granted the motion, ruling the release discharged Pizza Hut from all claims relating to the accident.
Pizza Hut does not dispute "that at the time of the accident, . . . Adams was in the course and scope of his employment for Pizza Hut."
¶6 As they did in the superior court, the Spieks argue Pizza Hut was not entitled to summary judgment, because they presented genuine issues of material fact regarding whether the release was void or otherwise unenforceable because of a unilateral mistake of fact or a breach of the implied covenant of good faith and fair dealing. We disagree.
A court may grant summary judgment when "there is no genuine issue as to any material fact and . . . the moving party is entitled to judgment as a matter of law." Ariz. R. Civ. P. 56(c) . We view the evidence in the light most favorable to the Spieks, against whom judgment was entered, and determine de novo whether there were genuine issues of material fact and whether the superior court misapplied the law. Unique Equip. Co. v. TRW Vehicle Safety Sys., 197 Ariz. 50, 52, ¶ 5, 3 P.3d 970, 972 (App. 1999).
¶7 As an initial matter we note the Spieks do not dispute that, under Arizona law, their release of Adams (if valid) would release their derivative claims against Pizza Hut. See De Graff v. Smith, 62 Ariz. 261, 269, 157 P.2d 342, 345 (1945) (release of employee from liability also releases employer); Law v. Verde Valley Med. Ctr., 217 Ariz. 92, 96, ¶ 13, 170 P.3d 701, 705 (App. 2007) (Uniform Contribution Among Tortfeasors Act, A.R.S. §§ 12-2501 to -2509 (2003), has not altered the common law pertaining to vicarious liability and De Graff remains good law). Instead, they argue they should not be bound by the release because they entered it under a mistake of fact induced by misrepresentations made by Geico; namely, they did not know Adams was in the course and scope of his employment with Pizza Hut at the time of the collision.
Accordingly, we do not need to address the Spieks' argument the release failed to release Pizza Hut because it did not specifically name Pizza Hut as one of the released parties.
Although the Spieks did not move to set aside the release in the superior court, they impliedly requested such relief by asking the court to deny Pizza Hut's motion for summary judgment on the grounds that the release was invalid.
¶8 In Arizona, a unilateral mistake induced by a misrepresentation may constitute a ground for avoiding a release. Hendricks v. Simper, 24 Ariz. App. 415, 419, 539 P.2d 529, 533 (1975). Further, a "unilateral mistake can be grounds for avoiding a release if at the time the release was entered into the other party [knew] or should have known of the mistake." Parrish v. United Bank of Ariz. , 164 Ariz. 18, 20, 790 P.2d 304, 306 (1990). In this case, however, the Spieks offered no evidence they entered the release under a material mistake of fact induced by any alleged misrepresentation made by Geico, or that Geico knew or should have known they were operating under a mistake of fact regarding Adams or Pizza Hut. Thus, the Spieks failed to establish the "genuine dispute as to a material fact" required to avoid summary judgment. State ex rel. Corbin v. Sabel, 138 Ariz. 253, 256, 674 P.2d 316, 319 (App. 1983).
¶9 Specifically, the only evidence the Spieks presented to the superior court showed: (1) they submitted a claim to Geico, (2) in response, Geico refused to disclose Adams' policy or to divulge his policy limit, (3) after they sued Adams, Geico tendered the policy limit -- $100,000 -- to them to settle their claim, and (4) they accepted Geico's offer and executed the release. The Spieks did not submit affidavits or other admissible evidence demonstrating that when they signed the release they had no knowledge Adams was in the course and scope of his employment at the time of the collision. They also failed to submit any evidence that, at the time they signed the release, they had no knowledge of Pizza Hut's secondary coverage.
We have searched the record for evidence that would support that inference and found none. See Schwab v. Ames Const. , 207 Ariz. 56, 59, ¶ 15, 83 P.3d 56, 59 (App. 2004) (a party's failure to respond to a motion for summary judgment with a written memorandum or opposing affidavits does not, by itself, entitle the moving party to summary judgment and the trial court must consider the entire record). The first amended complaint was not verified, and, even if it had been verified, it did not contain any allegations concerning the release or the Spieks' alleged mistake. In addition, although the Spieks asserted in their statement of facts they would never have signed the release if they had known of Pizza Hut's secondary coverage, they did not submit any evidence to support that statement.
¶10 Further, and even more importantly, even if a reasonable jury could infer from this evidence the Spieks did not know of Pizza Hut's secondary coverage and therefore entered the release under a mistake of fact, the evidence does not show Geico knew or should have known the Spieks were so mistaken or had taken any steps to mislead them about the availability of Pizza Hut's secondary coverage. The Spieks presented no evidence Geico knew or should have known Adams was in the course and scope of his employment at the time of the collision and Pizza Hut, as his employer, had an insurance policy that would potentially cover the accident. Although the Spieks contend Geico refused to provide them records that would have revealed Pizza Hut's secondary coverage, they presented no evidence they asked Geico to disclose all insurance coverage applicable to Adams and his vehicle or even that Geico had that information. In short, the Spieks' contention Geico knew Pizza Hut had additional applicable insurance coverage and hid it from them is simply unsupported by the record.
We note the Spieks did not request additional time, pursuant to Arizona Rule of Civil Procedure 56(f) to obtain evidence concerning Geico's knowledge, if any, regarding Pizza Hut's potential liability and insurance coverage.
¶11 The Spieks also contend Pizza Hut was not entitled to summary judgment because Geico breached the implied covenant of good faith and fair dealing by failing to disclose Pizza Hut's secondary insurance coverage. See Wells Fargo Bank v. Ariz. Laborers, Teamsters and Cement Masons Local No. 395 Pension Trust Fund, 201 Ariz. 474, 490, ¶ 59, 38 P.3d 12, 28 (2002) (covenant of good faith and fair dealing, which prohibits a party from doing anything to prevent other parties to a contract from receiving the benefits of the agreement, is implied in every contract); Rawlings v. Apodaca, 151 Ariz. 149, 158-59, 726 P.2d 565, 575-76 (1986) (tort cause of action for breach of the implied covenant imposed in "special relationships" characterized by elements of public interest, adhesion, and fiduciary relationship). Again, we disagree with the Spieks.
¶12 First, as discussed, the Spieks presented no evidence Geico knew or should have known about Pizza Hut's secondary coverage at the time they signed the release or that Geico took any steps to misrepresent the availability of Pizza Hut's secondary coverage. Second, the Spieks did not sue Geico for breach of the implied covenant, and third, the Spieks presented no evidence Geico violated any duty it owed to Adams as its insured.
¶13 Finally, at page 39 of their opening brief, the Spieks argue "[u]nder the reasonable expectations doctrine[], Spiek was entitled to trust that Geico would not . . . unreasonably deprive" him of coverage from Pizza Hut or under-insured motorist coverage from his own insurance carrier. The Spieks did not raise this argument in the superior court, and it is not, therefore, properly before us. Trantor v. Fredrikson, 179 Ariz. 299, 300, 878 P.2d 657, 658 (1994) ("Because a trial court and opposing counsel should be afforded the opportunity to correct any asserted defects before error may be raised on appeal, absent extraordinary circumstances, errors not raised in the trial court cannot be raised on appeal.").
See generally Gordinier v. Aetna Cas. & Sur. Co., 154 Ariz. 266, 742 P.2d 277 (1987).
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CONCLUSION
¶14 For the foregoing reasons, we affirm summary judgment in favor of Pizza Hut. As the successful party on appeal, we award Pizza Hut its costs on appeal contingent upon its compliance with Arizona Rule of Civil Appellate Procedure 21. See Arizona Revised Statutes section 12-342 (2011).
PATRICIA K. NORRIS, Judge CONCURRING: MICHAEL J. BROWN, Presiding Judge PHILIP HALL, Judge